That's a good question, one I've been thinking about for a while in my 2 years of playing TF2 a lot. I think it has something to do with "Hey look, I'm a good player" or just simply making a statement about your character. Maybe in reality it doesn't do anything when people know you're bad/good at the game, but if you're good, the hat represents a mark of who you should watch the **** out for.

Like for example, there's a very good enemy pyro on my usual server who dons an unusual pyro hat (An unusual hat is a hat that has a particle effect around it, like in this instance, it's a revolving green flame around his hat, and I forgot the name of the chef hat he was wearing, Connoisseur's Hat or something?) and I know how to identify him and watch the **** out.

So there are people who know this and know that there are people (most likely newer players wanting a grab at a good hat) and will scam them for better hats and eventually real money. Because most unusual hats go for real money at times, especially themed hats, like the Dragonborn's Helmet (the Skyrim Iron helmet the Heavy wears in game) having an unusual effect like Blizzard, which is a bunch of snow around it. A hat like that could easily go past $100 or even $200.

So hats are the "ranks" people have on TF2, and while it's not true, any new player could easily get lucky with a key and crate to unbox an usual hat (I had one before I sold it for a stupid price I'm ashamed to talk about). It does mix well with your skill in-game and how you want your character to look. (i.e. badass, silly, themed, etc.)

Well, by now there's a ton of good mods to play with, so your first time expression of the game will be improved by a lot. Especially if theres a mod that fixes the goddahm draugr somehow.. ******* draugr everywhere, every time, every dungeon.. I started with mods quite late, which i think is a shame.